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Dennis Mistrioty (left) and Griffin Lynch, of Wisconsin Hemp Scientific LLC, look over a bag of industrial hemp from a grower. It is the raw product from which they extract CBD and — note to stoners — you could smoke the entire bag and not get high. Michael Sears / Milwaukee Journal Sentinel

The principals in the company are Griffin Lynch (from left), Andy Gould, Dennis Mistrioty and Lisa Laskowski. The equipment in the background is a rotary evaporator used to remove solvents in the process to separate CBD form the industrial hemp at Wisconsin Hemp Scientific, in Sussex. Michael Sears / Milwaukee Journal Sentinel

Andy Gould (from left), Lisa Laskowski, Dennis Mistrioty and Griffin Lynch, principals in the company, look over some crude CBD oil they produced in some of their first production tests at Wisconsin Hemp Scientific, in Sussex. Michael Sears / Milwaukee Journal Sentinel

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Dennis Mistrioty (left) and Griffin Lynch, of Wisconsin Hemp Scientific LLC, look over a bag of industrial hemp from a grower. It is the raw product from which they extract CBD and — note to stoners — you could smoke the entire bag and not get high.(Photo: Michael Sears / Milwaukee Journal Sentinel)Buy Photo

Sussex – Standing inside the business he and his friends are setting up here, Dennis Mistrioty gestured toward a small Mason jar.

About the size of a man’s fist, it held several ounces of dark brown goo the consistency of honey.

“The way I kind of look at it,” Mistrioty said, “is this is like the liquid gold.”

Pretty close. Inside the jar was 200 grams of cannabidiol, or CBD, extracted from the flowers of hemp plants with equipment built by his partners, Griffin Lynch and Andy Gould, two recently graduated chemical engineering majors from the University of Wisconsin-Madison.

Retail value of that goo: Perhaps $10,000 to $20,000 — reason enough for Mistrioty, Lynch and Gould, who roomed together at college, to have equipped their new business, Wisconsin Hemp Scientific LLC, with security. Gould's aunt, Lisa Laskowski, also is a partner in the venture.

By early next year, they expect to be in full production, reducing hundreds of pounds of hemp flower into thick, “crude oil” CBD and selling it to eager wholesale customers who will further refine it into tinctures and lotions.

“We’re pretty confident that we can get rid of as much as we process,” said Lynch, 23.

Hemp is hot. The non-psychoactive cousin of marijuana can again be legally grown under pilot programs authorized by the 2014 Farm Bill, and the lifting of the decades-old ban in Wisconsin this year has sparked a flurry of business activity. The 2018 harvest here doesn’t look particularly good — wet weather and inexperience hampered many growers — but interest in the crop is strong.

The hardy plant lends itself to a wide variety of uses in food, fibers and even construction material. The biggest buzz, though, is about CBD.

Gold rush atmosphere

Advocates of the non-high-inducing cannabis compound tout its effectiveness with so many conditions — anxiety, epilepsy, depression and more — that skeptics might well regard the stuff as latter-day snake oil.

But studies have indicated that CBD may in fact help treat such things as inflammation, pain and insomnia, and much more research is underway. The Food and Drug Administration recently approved the first CBD-containing drug, Epidiolex, for treatment of some seizures.

So despite lingering legal ambiguity — a rarely enforced federal law still classifies CBD as an illegal drug — the lifting of Wisconsin’s hemp ban has touched off a rush to cash in on the do-everything elixir.

In little more than six months, about 20 CBD shops have opened across the state. Retailers say they have several more planned. There’s even a national company, American Shaman, that has registered to sell franchises here. Griepentrog bought one, in Portage, and is helping set up others.

Griepentrog said his store took in $100,000 in its first two months. Joel Peterson said his Black River Falls outlet, PriceLand Hemp, has sold more than 10,000 bottles of CBD oil since opening in late April.

“Business has been really outstanding,” Peterson said.

Growers, too, see possibilities.

Kattia Jimenez and her husband, John Eichorst, planted half an acre of hemp at their place south of Mount Horeb. The 500 plants they harvested are drying now. Jimenez estimates they’ll yield about 500 pounds of salable product — at $50 a pound.

“Currently, there is more demand than supply,” said Abbie Testaberg, a River Falls area resident who is equipping a 5,200-square-foot indoor, aeroponic growing and processing facility that she and her husband, Jody, estimate will produce five crops of CBD-rich hemp per year.

Connoils LLC, a Town of Waukesha nutritional ingredients manufacturer that also processes CBD, plans to grow hemp indoors after it moves its main plant to Big Bend.

Peterson, of PriceLand Hemp in Black River Falls, said he and partner Danyal Durman are teaming with another business to build an indoor growing house in Prairie du Chien and plan to open a store there, too.

“The egg is just getting cracked on hemp,” said Larry Konopacki, a Madison attorney who heads the recently formed Wisconsin Hemp Alliance.

Local musician Colin Plant recently opened the Canni Hemp Co. store in Walker’s Point, and another CBD store, Erth Dispensary, says it will open in Bay View next month.

Former Milwaukee Ald. Michael McGee Jr. and partner Maya Mays have opened five retail CBD outlets in four months. McGee, who served prison time after a 2008 conviction on charges including bribe-taking and extortion, said he has only been selling CBD since Juneteenth Day in Milwaukee.

“It went so well that in an hour we sold out of everything,” he said.

Three weeks later, he and Mays had a kiosk, 414 Hemp, at Mayfair. A month after that, they moved into a full-fledged store in the mall. Kiosks at Brookfield Square, East Towne and West Towne in Madison, and Fox River Mall in Appleton — with the names based on the local area codes — quickly followed.

Now, McGee said he is preparing to open pop-up locations this month in Eau Claire; Charlotte, North Carolina; and Grand Rapids, Michigan, with the possibility of turning those into regular retail outlets after the holidays.

Prairie du Sac resident Jacob Coates quit his job as an IT project manager for national companies last spring, maxed out his credit cards and, over the course of three months, opened Herb RX CBD shops in Sun Prairie, Sauk City and Baraboo. Business has been modest, but Coates sees big potential for the stores if medical marijuana is legalized as he believes it will be. He’s already working on opening three more locations.

'It isn't like picking corn'

Lynch, of Wisconsin Hemp Scientific, said an acre of hemp can bring $40,000 to $70,000 — a potential payoff that might sound very seductive to a hard-pressed farmer.

“But what’s kind of hidden in that number is the amount of work it takes to get it properly planted, properly harvested and properly dried,” Lynch said.

Indeed, Konopacki said, growing hemp for CBD requires extensive attention and labor. The closest Wisconsin crops in terms of demands on the grower are ginseng and tobacco, he said.

“It isn’t like picking corn, I’ll tell you that,” Konopacki said.

As with all crop farming, weather poses a risk; rain this fall cut the yields for some of the 139 farmers who planted hemp. Add to that the steep learning curve that comes with something new, and the need to find buyers in a market that is only beginning to be established.

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Wisconsin Act 100 was enacted on November 30, 2017. The bill allows for the revival of industrial hemp growing in Wisconsin. WisconsinEye takes a closer look at what hemp could mean for the future of Wisconsin.
Wisconsin Eye

Many farmers in hemp-growing states, including Wisconsin, haven’t been able to sell their 2018 harvest, said Ken Anderson, founder of Legacy Hemp, a Prescott firm that provides seed and other products and services to growers.

“A lot of these guys are being told, ‘You’re going to make $100,000 an acre’ … and then come right around harvest time suddenly they can’t get ahold of these people who were going to be quote unquote buyers,” Anderson said.

Hemp’s legal status, which looms over everything, could soon change. The 2018 Farm Bill, now pending in Congress, would legalize “industrial hemp,” defined as cannabis plants that contain no more than 0.3 percent THC, the psychoactive ingredient in marijuana.

If passed, as expected, the legislation would remove any question about the legality of hemp-derived CBD, opening the door to financing and likely igniting a boom in the industry.

'A big open question'

Reasons for skepticism, however, remain. Some involve the actual capabilities of CBD, which sound promising but still pose many questions.

Cannabinoid researcher Cecilia Hillard, a professor of pharmacology and toxicology at the Medical College of Wisconsin, said animal studies provide good evidence that CBD could reduce inflammation, anxiety and seizures, and enhance sleep.

“But what we know in humans is much more limited,” she said. “In fact, there have been only a couple of really good clinical trials done in humans.”

Hillard hopes to correct that. She is talking with companies that sell CBD about conducting such trials, “which I find very exciting,” she said.

But whether CBD is any better for inflammation than, say, ibuprofen, or any better for anxiety than, say, Valium, is “a big open question,” Hillard said.

And with CBD unregulated, exactly what consumers get when they buy the product is a concern.

“There may be a lot of inconsistencies in the preparation that somebody might purchase, and then there could be unintended molecules in there that could be toxic,” Hillard said.

For businesses, meanwhile, the gold-rush atmosphere could lead to hyper-competition if flocks of entrepreneurs swoop in for a piece of the action.

“Eventually the CBD market will become saturated,” said Testaberg, the River Falls grower, who plans eventually to pivot to agricultural hemp. “If that is in three years, five years or 10 years, I don’t know … but there is going to be a saturation.”

For now, though, the future looks promising, said Jimenez, the Mount Horeb-area grower and a driving force in organizing the Wisconsin Hemp Alliance. Like other growers, she plans to plant again next year.

“I think the potential for this industry is tremendous and we’d like to be a part of it,” she said.

As for the recently graduated crew at Wisconsin Hemp Scientific, they’re quite serious, but also are young enough to just be enjoying the ride.

“We’re still waiting to see if it will truly be worth it,” Lynch said. “But definitely so far it’s been truly exciting — lots of high highs and low lows.”